Prescott Real Estate News Blog's purpose is to keep current, past, and potential clients apprised of the real estate market conditions for the Prescott, Arizona Area. National and state news and events will be posted but special emphasis will be placed on Prescott Area and the Yavapai County - Prescott, Prescott Valley, Chino Valley, Dewey and Kirkland/Skull Valley.
-Prescott Real Estate News

Can you believe we're more than halfway through fall? As market conditions fluctuate, I'm here to make sure that you're receiving quality updates and information. As always, my goal is to make a difference in the successful completion of your real estate transactions.

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The Fed's Plosser argued against allowing inflation to rise to boost the economy

Italian bond yields rose to the highest levels since the Euro was launched

Oil prices climbed to $97 per barrel, the highest level since July

This week: +0.10%

Dow:11,850 -50

Last week: -0.10%

NASDAQ: 2,625 -25

With little economic data in the US last week, events in Europe were the primary influence on mortgage rates. During the week, shifting sentiment about the risk posed by Italy caused a high degree of volatility. By the end of the week, though, mortgage rates were little changed from week before.

Italy was the center of attention last week. While an important budget vote passed, Prime Minister Berlusconi failed to gain the support of a majority in Parliament. As a result, he agreed to resign. Italy will either hold special elections or will be ruled by a national unity government, a temporary coalition. Investors believe that a national unity government might be better able to implement politically unpopular austerity measures. The rapidly shifting events in Italy have had a significant impact on global financial markets and likely will continue to do so.

In Greece, an agreement was reached to form a coalition government, which is expected to accept the terms of the European Union bailout package. The Greek Prime Minister voluntarily resigned, and a new leader was named.

Bigger picture, the fundamental questions in Europe remain the same. Will the weaker countries make the sacrifices necessary to cut spending and will the stronger countries be willing to pay the cost of the bailout? As perceptions change for the likelihood of the spread of the European debt troubles, investors will continue to shift funds between relatively risky assets and safer assets. US government guaranteed mortgage-backed securities (MBS) are considered to be less risky assets, and changing demand for MBS will keep mortgage rates on the move.

The most significant economic data this week will be the monthly inflation reports. The Producer Price Index (PPI) focuses on the increase in prices of 'intermediate' goods used by companies to produce finished products and will come out on Tuesday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Wednesday. CPI looks at the price change for those finished goods which are sold to consumers. In addition, Retail Sales will be released on Tuesday. Retail Sales account for about 70% of economic activity. Industrial Production, another important indicator of economic growth, will come out on Wednesday. Housing Starts and Philly Fed will be released on Thursday.

The market commentary material provided is from a third party vendor, MBSQuoteline, and is not necessarily the opinions of the sender or the organization they represent. This information is intended for educational purposes only and should not be construed as investment and/or mortgage advice. Additionally, the material is deemed to be accurate and reliable, but there is no guarantee it is without error.

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